Category Archives: East Africa
East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN scheme of geographic regions, 19 territories constitute Eastern Africa:
Tanzania, Kenya, Uganda, Rwanda, and Burundi – members of the East African Community (EAC). Burundi and Rwanda are sometimes considered part of Central Africa
Djibouti, Eritrea, Ethiopia and Somalia (which includes Somaliland – collectively known as the Horn of Africa.
Mozambique and Madagascar – often considered part of Southern Africa. Madagascar has close cultural ties to Southeast Asia and the islands of the Indian Ocean.
Malawi, Zambia, and Zimbabwe – often included in Southern Africa, and formerly of the Central African Federation
Comoros, Mauritius, and Seychelles – small island nations in the Indian Ocean
Réunion and Mayotte – French overseas territories also in the Indian Ocean.
East Africa is often used to specifically refer to the area now comprising the countries of Kenya, Tanzania, and Uganda.
KBR Wins Tanzania LNG Contract
KBR announced that it was awarded a contract by Statoil Tanzania AS to perform pre-front end engineering and design (pre-FEED) studies for a prospective liquefied natural gas facility in Tanzania, East Africa.
The pre-FEED study is designed to help Statoil further assess the viability of developing an LNG facility to export natural gas from this East African region. The project is expected to be completed during 2013.
“We are excited to be selected by Statoil for this important project,” said Mitch Dauzat, president, Gas Monetization. “KBR looks forward to working together with Statoil to define their LNG concept for Tanzania.”
KBR has been working with Statoil for more than 30 years and has an outstanding record for successful project execution, predominantly for Statoil’s Gas Processing plants.
Wood Mackenzie: East Africa’s Yet-to-Find Reserves Hold 95 tcf of Gas
Wood Mackenzie estimates that 100 trillion cubic feet (tcf) of gas has been discovered in Mozambique and Tanzania to date, ranking the Rovuma Basin as one of the most prolific conventional gas plays in the world.
However, there are significant technical and commercial challenges to be overcome in order to bring the gas to market by the end of this decade. These include: addressing issues around infrastructure, government capacity, financing and reaching a positive outcome to unitisation negotiations in Mozambique.
Recent discoveries and high profile M&A activity in Mozambique and Tanzania are attracting attention and Martin Kelly, Wood Mackenzie’s Head of Sub-Sahara Upstream Research, says the interest is justified: “100 tcf of gas has been discovered to date in East Africa and we estimate yet-to-find reserves could be as much as 80 tcf in Mozambique and 15 tcf in Tanzania. There is clearly plenty of gas to supply the likely commercialisation route of LNG – theoretically enough to support up to 16 LNG trains.
“The Rovuma basin is the most prolific in the region, and one of the hottest conventional gas plays in the world, with 85 tcf discovered so far. Globally in 2011, it yielded the third most hydrocarbons, and we expect it to top the list in 2012 if the first half of the year is anything to go by,” Kelly continues.
In neighbouring Tanzania, the targets are the northern extension of the Rovuma Basin and the Mafia Basin. Kelly says: “Tanzania has enjoyed considerable exploration success as well, but hasn’t discovered the same scale of reserves. The average discovery size is much smaller at around 2 tcf, compared to Mozambique which is over 7 tcf. Discoveries in Tanzania are also more spread out, so developing them will be more expensive than those in Mozambique because additional infrastructure will be required.”
One of the most immediate challenges for Mozambique, is the unitisation discussions which Wood Mackenzie understands have already begun. Kelly explains; “Of the 85 tcf of gas discovered to date in Mozambique, around half of it is thought to be one enormous field which is in communication across the block. Under Mozambican law, a unitisation agreement between the operating parties will be required.”
Although there is a risk that unitisation discussions could delay Final Investment Decision (FID) – the crucial last step before commercial development – and therefore LNG production, there are other discoveries which are wholly contained in Area 1 and Area 4 and therefore gas could come from these first.
Giles Farrer, Senior LNG research analyst for Wood Mackenzie comments: “Many challenges will need to be overcome prior to LNG project sanction. The region’s remoteness and lack of development present serious technical obstacles. There is virtually no existing skilled workforce and both Mozambique and Tanzania will have to build and establish deepwater ports capable of servicing the needs of the petroleum sector. On the commercial side, there is the question of government capacity – whether there is sufficient impetus and capability within the governments and national oil companies to advance the huge legislative, bureaucratic, customs and financial challenges that such a development would bring.
“The major outstanding milestone for Mozambique is the conclusion of a commercial framework agreement, which is in the process of being negotiated. It will determine how the LNG facility or facilities will be structured for the purpose of taxation and whether the Joint Ventures (JVs) will co-operate in the construction of a single, mega LNG facility, or pursue individual developments. One crucial advantage that the Tanzanian projects enjoy is that they have already negotiated commercial terms, prior to the announcement of their projects.”
Farrer continues: “Lastly there is the question of finance, we estimate that a two train greenfield development in the region is going to cost at least US$25 billion, and for some of the players involved financing their share of this sort of development cost will certainly prove challenging and could delay development.”
The joint analysis by Wood Mackenzie’s upstream and LNG research teams stresses that these challenges are not insurmountable. “They have been encountered and overcome in several countries before. The risk is that delays could lengthen development schedules and add to costs,” Farrer says in closing.
Wood Mackenzie: East Africa’s Yet-to-Find Reserves Hold 95 tcf of Gas| Offshore Energy Today.
It Looks Like The Newest Country In The World Is Officially At War
by Adam Taylor
The situation between South Sudan and Sudan over disputed oil fields has been on the verge of blowing up into a full scale war for weeks.
Today AP is reporting that South Sudan’s president has said that Sudan has now declared war on his country.
This could be a big deal, with other African nations and even Sudan’s Chinese allies at risk of getting involved.
Read more: BI
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Apache Hires Drillship for Ops Offshore Kenya
Pancontinental Oil & Gas NL reports that the Kenya L8 licence operator Apache Kenya Limited (Apache) has secured the use of the deepwater drilling ship Deepsea Metro 1 to drill the giant Mbawa Prospect.
Apache is anticipating a spud date within Q3 2012, with the actual date depending on when the drilling rig is finished with its current operations.
The well is expected to take some 45 to 60 days to complete to a planned total depth of 3,250m subsea in water depth of 860m, easily within the range of modern equipment.
Pancontinental has a 15% interest “free-carried” through Mbawa drilling by Tullow Oil plc up to a “cap” of US$ 9 million (as may be reduced by other exploration expenditure). Pancontinental now expects to have contribute more to the well cost due to increased well cost estimates.
Pancontinental estimates that Mbawa has maximum potential to contain 4.9 Billion Barrels of oil in place at the main Tertiary / Cretaceous level with significant additional potential also to be tested by the well at the deeper Upper Jurassic level and shallower Tertiary levels. Only drilling is capable of verifying the oil and gas volumetric potential (if any) of the Mbawa Prospect.
Pancontinental has four projects offshore Kenya covering more than 18,000 square kilometres in licence areas L6, L8, L10A and L10B, with the L8 / Mbawa project being the most advanced and Mbawa being the first prospect to be drilled.
Pancontinental’s CEO Barry Rushworth commented;
“Pancontinental is in the unique position of having sizeable interests in a number of Kenyan and Namibian offshore licences and having substantial leverage to any Mbawa drilling success. We are very pleased that a drilling rig contract has now been signed by our operator Apache for the L8 Mbawa Prospect. We are pursuing what we see as a major oil play rather than a gas play offshore Kenya and we are doing the same offshore Namibia. The economics of oil developments are often far better than those for gas, with potential for much earlier cash flow and much lower development costs compared to LNG, for example. Apache is now leading the L8 venture in an aggressive exploration programme and in our other Kenyan blocks L10A and L10B we also have fast-moving activity led by BG Group”.
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BG Group makes fourth gas discovery in Tanzania
BG Group announced Monday a fourth Tanzanian gas discovery from the Jodari-1 exploration well located in Block 1 offshore southern Tanzania. Preliminary evaluation of the well results indicates gross recoverable resources are in the range of 2.5 to 4.4 trillion cubic feet (tcf) of gas.
The partnership of BG Group (60 percent and operator) and Ophir Energy (40 percent) have had exploration successes in all four wells so far drilled in Tanzania, with mean total gross recoverable resources currently estimated to be approaching some 7 tcf of gas.
Jodari-1 is located approximately 24 miles (39 kilometers) offshore southern Tanzania and in a water depth of 3,770 feet (1,150 meters). It is part of the current three-to-four well exploration program, which also includes the acquisition of 965 square miles (2,500 square kilometers) of 3D seismic data in Block 1.
The next target for drilling is the Mzia-1 location in Block 1, some 14 miles (23 kilometers) to the north of Jodari-1. The discoveries announced previously are Chaza-1 in Block 1, and the Chewa-1 and Pweza-1 discoveries in Block 4.
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